Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
C. Tremblay (613) 957-2139
Feb 9 1988
Dear Sirs:
Re: Qualified Farm Property
This is in reply to your letter of November 20, 1987 requesting our interpretation of the definition "qualified farm property" as defined in subsection 110.6(1) of the Income Tax Act (the "Act") in a situation where only 20% of the land has been used for farming by an individual for the past six years. The balance of the land is considered unusable and left vacant.
Our Comments
Under subsection 110.6(1) of the Act a real property owned by an individual will be considered as a "qualified farm property" if it was used by him, his spouse or any of his children in the course of "carrying on the business of farming" in Canada. The term "carrying on the business of farming" is not defined in the Act. In our view, it is a question of fact that can only be determined after an examination of all the facts of the farming operation of the taxpayer. Generally, however, if 80% of the land has never been used in the farming business, that portion will not be considered "qualified farm property" and if the individual does not have an expectation of profit on the remainder he will not be considered to be "carrying on the business of farming".
We trust this will be of assistance to you.
Yours truly,
for Director Small Business and General Division Specialty Rulings Directorate Legislative and intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1988
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© Sa Majesté la Reine du Chef du Canada, 1988
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